Monday, February 20, 2012

Solving the Greek puzzle

February 20, 2012

After weeks of angry words, tear gas and smoke, there is an air of agreement over the salvage of Greece. European finance ministers gathered in Brussels tonight sounding hopeful that an accord over a second Greek bail-out, worth €130 billion ($170 billion), was at hand.

“Today we have all the elements we need to reach a deal. It's like a puzzle. All the pieces are on the table; what's needed now is to put them together,” said François Baroin, the French finance minister. Even Germany’s Herr Nein, Wolfgang Schäuble, said he was confident of a deal, saying ministers were “aiming to finalise the decision on a new rescue package for Greece”.

Another symbolic bit of good news came from the European Central Bank (ECB), which announced today that it had made not made any purchases last week under its bond-buying programme. This is the first time the ECB has not resorted to this emergency measure since August, when it acted to stop Italy and Spain from being sucked down the drain.

So is the debt crisis finally on its way to resolution? Not so fast. The Dutch finance minister, Jan Kees de Jager, poured so much cold water on his colleagues' optimistic comments that the euro dropped immediately. On his way into the meeting, he said:
Greece wants the money and so far we haven’t given them anything. We have said no over the past weeks. We can afford to say to no until Greece has met all the demands. It’s up to Greece and the troika to say whether this has been done and for us it is a no until Greece has done so.

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